Definition of business acumen
Business acumen is keenness and speed in understanding and deciding on a business situation.
In practice, people with business acumen are thought of as having business 'sense' or business 'smarts'. They are able to obtain essential information about a situation, focus on the key objectives, recognise the relevant options available for a solution, select an appropriate course of action and set in motion an implementation plan to get the job done. When they discover that changes are required to adapt to unforeseen circumstances, they make the adjustments as necessary and keep the activity moving forward. They are more often right than wrong in their assessments and choices and are admired by others both for their acumen and business success.
People with strong business acumen use an explicit or implicit business framework to ensure completeness and integration as they assess a business situation. The framework links the objectives of key stakeholders, the competitive strategies required for success, the people and activities needed to produce and sell products and services, and the business processes that support a manager's ability to deal with the complexity. The framework is robust and therefore generally applicable to all types of business activity. In a particular business, this framework is often referred to as the business model.
Business acumen also requires a thought process that ensures a focus on critical factors, an appreciation of the future consequences of actions taken today and the recognition that future activities require constant monitoring and adjustment when things don’t go according to plan. These three ideas are summarised by the terms mindfulness, sense-making and resilience.
Business acumen is learned, not innate. A person develops business acumen through some combination of business experience and formal training. Such personal development requires an understanding and application of the management processes to ensure a disciplined and consistent approach to analysis and decision making.
Steve Jobs had business acumen. It has been said that most if not all of the key technologies underlying the iPad existed prior to the creation and success of that device. Additionally, most of the functionality provided by the iPad was already available to consumers through other devices. Jobs succeeded in creating a unique combination of functionality, convenience in use and accessibility that offered compelling value to customers, suppliers (creators of applications) and investors. The foresight and insight that leads to such a creative merging of stakeholder interests is the essence of business acumen.